Deflation pressures have begun to ease and trade-weighted dollar prices have passed their peak, Principal Global Investors chief global economist Bob Baur said, and with oil prices passing their low point, some of the challenges facing global markets are set to recede.

“Real growth is still slow, but nominal growth is picking up as deflation fades, and it is nominal growth that brings profits,” Mr Baur added.

Mr Baur commented that the improving US job market was supporting consumer confidence in the US, with consumers now “the most upbeat since August 2007”.

“Confidence rose the most at the lower end of the income distribution; for households with income under $15,000, optimism is the highest in 15 years,” he noted.

Outside of the US, Mr Baur said economic data is looking equally positive, with China’s economy stabilising and household spending driving growth across the Eurozone.

“Eurozone business surveys have held steady since the UK vote [to leave the European Union], but the latest manufacturing reading is up nicely in September. Consumer confidence is rising in France, Germany and Italy,” he said.